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“Elastic Finance”, the biggest Crypto innovation since Bitcoin (BTC)? – Cryptocurrencies

Elastic finance, the next wave of DeFi projects

Currently diving into a DeFi with an exploding Total Value Locked (TVL) is like doing a bungee jump without being sure that the 2 ends of the bungee have been securely attached. The sector is growing with controversial cloning and speculation practices such as yield farming; will cryptophiles be more flexible in judging finance elastic?


Forecasts and predictability of elastic finance

Eslatic finance or elastic finance is the latest addition to DeFi after yield farming.

Some analysts are predicting that this could well spawn the next generation of financial platforms.

The CEO of Ampleforth Foundation, Evan kuo, claims the creation of this system with the token AMPL.

Kuo explains that “rebase” type tokens like AMPL are the basis of elastic finance: this mechanism makes it possible to control price volatility by adjusting the available supply according to price fluctuations.

The concept of elastic finance would be linked to the thesis of predictability, developed by the price Nobel James Buchanan, as opposed to the discretionary choice of each individual: for Buchanan, this predictability would allow for more efficient financial institutions.

Let’s talk more about elastic finance

Kuo and his team conducted a further analysis of the matter, concluding that standardized changes in supply may reduce the correlation of market capitalization of theAMPL with Bitcoin (BTC) and theEther (ETH).

Elastic assets can further reduce the risks associated with automatic liquidation in systems that use a basket of collateral assets.

Ampleforth Foundation recently published a roadmap for the further development of this type of asset.

After the launch of a AMPL-LEND pool on 1er September 2020, Kuo explained that his team planned to create a number of products specifically dedicated to elastic finance, such asAutomated Market Maker (AMM) or loan platforms.

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Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.

Uniswap was enough to create an abundance of cloned DeFi products with little originality. Elastic finance is expected to be at the root of many DeFi projects, with promoters who will probably not hesitate to put the concept forward, to “pull” it to the max, to sell their babies. Cryptophyls should however temper their enthusiasm because, a rubber band that creaks, is painful for the hands – or for wallets – people who hold at least one of its 2 ends.

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